KGL Resources intersects visible copper, lead and zinc at Jervois

2013-11-23
by Proactive Investors

KGL Resources’ (ASX: KGL)
resource extension drilling program at its Jervois Project in the
Northern Territory continues to return strong results with the
intersection of massive sulphides with visible copper, lead and zinc.

Notably,
the greater than 10 metre wide interval at the Marshall Deposit is
below the existing Inferred Resource boundary and remains open at depth.

The core has been cut and despatched to the lab for analysis with results anticipated next week.

“We
are delighted with the discovery of visible copper, lead and zinc
sulphide below the existing inferred resource at Marshall, that supports
the potential scale of the Jervois project,” managing director Simon
Milroy, said.

“The Rockface discovery of copper mineralisation
400 metres to the west and along strike from the Rockface prospect
illustrates the prospectivity of the Jervois project and the potential
to add additional high value, shallow resources that can be mined from
an open pit.”

Drilling along strike both north and south of this location is planned to be completed before the end of December.

The
diamond drilling is part of a resource extension program that commenced
in September with the aim of increasing the global resource as part of a
pre-feasibility study.

Rockface

Approval
has been received for a 13 hole drill program on the north (downdip)
side of the Rockface prospect and preparation of an access road and
drill pads is nearing completion.

This provides good access to
test the Rockface IP anomaly and commence infill drilling along an
untested 400m zone that extends between the historical Rockface
intersections to the most recently announced intersections in holes
KJC033 and KJC035.

An additional track-mounted diamond rig has been
mobilised to site and will initially target the centre of the Rockface
IP anomaly (Figure 4) and then move to infill the untested areas between
the two zones of copper mineralisation.

KGL will now have three rigs drilling at Jervois up until the Christmas break.

The
Rockface mineralisation is on a separate mineralised trend that has
been traced for over one kilometre and is delineated by a ferruginous
schist with malachite occurrences that is parallel but north east of
Bellbird mineralised trend where there is already a substantial resource
established.

KGL Resources is aiming to increase the overall scale of the multi-metal resources at
Jervois as part of a Pre-Feasibility Study currently being undertaken.

Analysis

KGL Resources has a market cap. of around $11 million, and with over $10 million in
cash, the company's enterprise value is not much more than a million
dollars.

Proactive Investors estimates a share price target of $0.13 to $0.15 for KGL Resources in the next 6 to 9 months, based on the resource based at Jervois, key
catalysts ahead, a resource upgrade and the completion of a
Pre-Feasibility Study in the first half of 2014.

The importance
of today's drilling results from Jervois is that the broad zones of plus
1% copper mineralisation should increase the current resource.